ABSTRACT
In finance the 'efficient market hypothesis' asserts that financial markets are 'informationally efficient', making the achievement of excess returns in the long run (theoretically) impossible. This chapter describes technical application of philosophical ideas, namely, Charles Sanders Peirce's theory of cognition, its application to the general pragmatic theory of information, and, further, to analyses of market efficiency. It argues that pragmatist ideas concerning the process of human cognition may be helpful in conceptualizing buyers' and sellers' behaviors in various markets. The chapter offers a pragmatic theory of information proposed by E. D. Weinberger. It concentrates on its general assumptions, conceptual background, and general aims rather than on detailed mathematical solutions. The chapter also argues that Weinberger's theory of pragmatic information is in fact the heritage of Peirce's views on human cognitive patterns. It explains applications of Weinberger's theory of information and Peirce's reflections on human cognition to economic analyses of market behavior.
